Attracting foreign investment, tackling the skills deficit, a new White Paper on collaborating effectively with the private sector to develop the country and harnessing the positives of the fourth industrial revolution while negating its potential negative impacts on jobs are all issues facing the Department of Science and Industry. Minister Mmamoloko Kubayi-Ngubane explains how the Department will achieve these goals.
Role of science and technology in attracting $100bn in FDI
The Department of Science and Technology (DST) will play a role in mobilizing investment in the Science, Technology and Innovation space.
Our investments that we have made over the past years in research and development in Science and Technology are starting to bear fruits. This is evidenced by the increase in the number and quality of patents we are registering as a country. In addition, DST entities, such as the Council for Scientific and Industrial Research (CSIR), have developed a number of technological products that are ready for commercialization. These products are in sectors such as energy, 3D printing, Biometrics, Biotechnology, Mining and many others.
Our programme on Indigenous Knowledge Systems has attracted large pharmaceutical companies from all over the world because it is a unique opportunity to turn age-old African medicinal remedies into global products. These products presents investment opportunities for investors to commercialize not only locally but in the African continent and the world.
We also want to increase the South Africa’s investments in Research and Development (R&D). One of the tools that remain important in improving the attractiveness of investing in R&D is our tax incentive. The incentive allows for a 150% tax break on the amount invested in R&D, and deduction of depreciation on equipment used for R&D.
Working with private sector
I think that building business confidence is important for government. Policy certainty in this regard is important. I think that our government continues to do well in this aspect. We have mechanisms and processes in place that are well understood by business when a need arises for a policy change that takes place within the context of strong institutions. A combination of these two factors is important in relation to managing and minimizing risk for business.
Our sector has a history of good relations with the private sector. This is evident in the collaborations between the public and private sector. Ours is to continue building on the good relationship that is in place. For instance, the collaboration between our Department, Mineral Resources, Monitoring and Evaluation, Trade and Industry and the private sector in the Mandela Mining Precinct demonstrates what can be achieved when government partners with the private sector.
One of the commitments that we have made is around the reduction of the turnaround time when considering the application of tax incentives from expenditure on R&D. This commitment was made as a result of taking into account contributions from the private sector in relation to steps that can be taken in order to boost investment in R&D. This commitment will go a long way in increasing the uptake of investment in research and development.
The new White Paper on Science, Technology and Innovation, which we are finalizing envisages a National system of Innovation that will enjoy greater participation by the private sector. Business will be given greater opportunity to commercialize products and patents that will arise from publicly funded research. Science and Technology will be at the centre of our development agenda and that means business and government have to work together to ensure that this becomes a reality.
Partnerships in SADC
South Africa has world-renowned institutions of higher learning in science and technology research and teaching. Thus, South Africa plays a critical role in Human Capacity Development for SADC and the African continent. Through partnerships between institutions in the African continent and South African institutions, the research output in science and technology has been increasing steadily.
South Africa is a highly industrialized economy and it is a larger economy relative to other countries in the continent. Given these two factors, technology diffusion in the South African economy is higher and there is relatively higher investments in science and technology infrastructure for research and investments.
South Africa should use its scientific capacity for the benefit of SADC and Africa through partnerships in Science, Technology and Innovation. This role is aptly demonstrated by our partnership with Botswana, Ghana, Kenya, Madagascar, Mauritius, Namibia and Zambia through the Square Kilometre Array (SKA) project, a large telescope to be built in South Africa and Australia. This partnership has over time produced human capital in radio astronomy in the continent, and the creation of new academic programmes in physics and astronomy in the African continent. The partnership has also seen the conversion of old telescopes to radio telescope that are suitable for the SKA project. This has led to a meaningful transfer of skills through partnership, and for instance, the launch of the Ghana Radio Astronomy Observatory.
Our main responsibility as DST in education and skills development is post-graduate student funding. In this regard, the DST will continue to use its funding drive for postgraduate students at Honours/BTech, Masters, PhD and post-doctoral fellows. For instance we have funded over 14,598 postgraduate students in the 2017/2018 period through one of our entities, the National Research Foundation. This exceeded the targets for postgraduate students funded per level, by 2% and 9% respectively. Of those supported, 78% were black against a target of 69% and 57% were female against a target of 58%. A total of 4,700 researchers were supported over the period.
The creation of a critical mass in science and technology can only be built through a concerted investment effort. The creation of the qualified base in the science and technology offers our country an opportunity to tap into this capacity in order to attend to the challenges of education and skills development. We have over time observed the absorption of students that we have funded in academia and research institutions that produce knowledge.
We will also continue to work with the private sector in offering support to students that need experiential training in order to complete requirements of study for the completion of their degrees. This is an important intervention that is at the heart of skills development through marrying theoretical study and experiential training.
Fourth Industrial Revolution
The impact of the fourth industrial revolution on existing business and employment is expected to have negative correlation in that businesses will automate, leading to higher productivity, which means employment will decrease. In this connection, it is estimated that by the year 2020, more than 7.1 million jobs will be displaced, and by 2050 half of the jobs that currently exist will have disappeared. It is also estimated that 65% of the children that are entering primary school today will end up working in jobs that do not currently exist.
The fourth industrial revolution presents us with an opportunity to drive economic development, new ways of doing things and find solutions to the challenges by driving new technologies. As such, the Department of Science and Technology has tabled a new White Paper on Science, Technology and Innovation for South Africa, which will be finalized by end of this year. Essentially, the premise of our new White Paper is that science, technology and innovation are central to inclusive and sustainable development for shaping a different South Africa. This effort will go a long way in increasing investment in building our capacity in Science, Technology, Engineering and Mathematics (STEM) subjects. It is through investments in these subjects and new sets of skills that we can prepare our country for the fourth industrial revolution from the standpoint of being globally competitive.
The introduction of technology in production processes presents opportunities for business to optimize their production. Increased production will create resources for new investments leading to new businesses. Fourth industrial will spawn new industries driven by the new technologies and the increased resources for investment. This new industries will create new types of jobs that will require a new set of skills.
Supporting South Africa’s SMEs
The Department has a grassroot innovation programme that is targeted at providing support for innovation with the aim of commercialization. The programme offers support towards the development of products. The support includes access to technology stations for grassroots innovation that allows for access to design and machining expertise, and prototype development. The support extends to intellectual property protection and the development of marketing material for innovation that has a potential to be commercialized. The Department also provides support through its entities for funding through the Technology Innovation Agency, and for technical knowhow that is critical for the scaling up of manufacturing through the CSIR. Interventions of this nature create scope for the intensification of products that result from Indigenous Knowledge. This is an area for me because knowledge produced by indigenous communities was, for the longest time, regarded illegitimated and looked at with suspicion. We see the white paper pronouncements as playing a key role in driving the growth of Indigenous Knowledge Systems. Of course it will be supported by the Indigenous Knowledge System Bill that is before parliament and awaiting the President’s signature. The work that we are doing will go a long way towards the decolonisation of knowledge.